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Information and Advisory Note Number 45 Back to menu
An introduction to environmental auditing
1. Introduction
1.1 There is now a range of practices which come under the label of environmental auditing.
This Note is provided as an introduction to an activity which is of increasing interest in the
public and private sector.
2. Background
2.1 Environmental auditing originated in the United States in the 1970s. At first reactive in
focus, environmental considerations were dealt with by 'end of pipe' solutions. Control
measures were heavily influenced by the need to reduce remediation costs and fines which
might stem from industrial accidents, and from the need to manage environmental liabilities.
2.2 Environmental auditing was introduced to the UK and elsewhere mainly by multi­national
companies who began to apply the audit procedures corporately and via subsidiaries
(horizontally). It is now being encouraged down the supply chain when large companies
demand that their suppliers have green credentials (vertically). Environmental auditing has also
become more proactive as organisations have recognised potential market and stakeholder
benefits, efficiency gains, financial savings, and the importance of improved public relations.
2.3 Historically, environmental auditing has been developed for industrial (chemical and
manufacturing) applications. Interest has also occurred in the public sector, resulting from the
various Charter initiatives to open up activities to greater public scrutiny. Local authorities now
apply auditing in their work. This can be expected to grow more rapidly as a result of new
commitments towards sustainable development and the implementation of Local Agenda 21.
3. Definitions
3.1 The term 'environmental auditing' is broad. Many definitions cover auditing in the private
and public sector.
3.2 Private sector environmental auditing has been variously defined as:
'a management tool comprising a systematic, documented, periodic and objective evaluation of
the performance of the organisation, management system and processes designed to protect
the environment with the aim of: (1) facilitating management control of practices which may
have impact on the environment, and (2) assessing compliance with company policies'. (CEC,
1993); and

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the systematic examination of the interaction between any business operation and its
surrounding. This includes all emissions to air, land and water legal constraints; the effects on
the neighbouring community, landscape and ecology; and the public's perception of the
operating company in the local area' (CBI, 1990).
3.3 Many types of audit have been carried out by companies (ERM, 1996, Thompson and
Therivel, 1991):
compliance audit ­ the most common type of audit consisting of checks against
environmental legislation and company policy;
issues audit ­ an evaluation of how a company's activities relate to an environmental
issue or (e.g. global pollution, energy use) or an evaluation of a specific issue (e.g.
buildings, supplies);
health and safety audit ­ an assessment of risks and contingency planning (sometimes
merged with environmental auditing because of the interconnected impacts of industrial
processes and hazards);
site audit ­ an audit of a particular site to examine actual or potential environmental
problems;
corporate audit ­ an audit of the whole company and its polices, structures, procedures
and practices;
due diligence audit ­ an assessment of potential environmental and financial risks and
liabilities carried out before a company merger or site acquisition or divestiture (e.g.
contaminated land remediation costs);
activity or operational audit ­ an assessment of activities that may cross company
departments or units (e.g. energy or waste management) and
product or life cycle audit ­ an analysis of environmental impacts of a product
throughout all stages of its design, production, use and disposal, including its reuse and
recycling (cradle to grave).
3.4 The above have been described as partial environmental audits (Welford and Gouldson,
1993) to distinguish them from the more specific environmental audit and, in particular, the
periodic audit that forms a crucial step in environmental management systems (EMS). Each is
discussed below in sections 4 and 5 respectively.
3.5 In the public sector, local authorities have led the way in environmental auditing. Two forms
have been defined (LGMB, 1991):
External audit ­ 'An assessment of the condition of the local environment, usually resulting in a
State of the Environment Report (SoE or SOER)'and
Internal audit ­ consisting of two areas:
'Policy Impact Assessment ­ a review of the activities (objectives, services, practices
and policies) of the authority' and
'Management Audit ­ a review of the procedures and structures by which environmental
policies are managed by the authority'.
3.6 'Strategic Environmental Assessment' (SEA) has emerged in recent years as a way of
appraising the environmental impacts of polices, programmes and plans (Bedfordshire County
Council/RSPB, 1996). As such it is a method for Policy Impact Assessment. Many local
authorities in England and Wales have undertaken or are currently preparing one (Therivel,
1994,). In Scotland SEA was piloted in Gordon District in 1994, followed by Clackmannan

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District Council in 1995. SEA is also being explored as a way of identifying the potential
environmental impacts of some of the Structural Fund Programmes (Objective 1,2 and 5B).
4. Environmental auditing practice and procedures
4.1 The more specific type of environmental audit involves the collection, collation, analysis,
interpretation, and presentation of information which is used to:
assess performance against a set of requirements or targets, related to specific issues;
evaluate compliance with environmental legislation and corporate policies; and
measure performance against the requirements of an environmental management system
standard.
4.2 The systematic, periodic, documented and objective aspects of environmental auditing are
fundamental to effectiveness. It is fast developing as an important and powerful tool in the
corporate environmental assessment and management toolkit. The requirement periodically to
repeat audits ensures that there is an ongoing commitment and a systematic process to
improve environmental performance (Grayson, 1992). The scope of repeat audits can also
broaden to become more comprehensive as experience and expertise are accrued or as new
issues or legislation emerge.
4.3 Sometimes the terms assessment, appraisal, monitoring or review have been used
interchangeably with audit. Audit implies detailed statistical verification with a periodic cycle
between audits. An assessment or review is usually a one­off event which is carried out in less
detail and with less direct checking of data.
4.4 Environmental Reviews provide a baseline overview of current environmental effects or
impacts, relevant environmental legislation and a statement of existing environmental
performance. The Reviews provide a basis for establishing a management action plan. They
can become part of an environmental management system to help implement the plan. When
they are undertaken as the first of a series of periodic environmental audits they have been
referred to as a 'Baseline Environmental Audit'.
4.5 Environmental audits should be appropriate to the particular circumstances. As
environmental auditing draws upon various methodologies, each organisation will define its own
system depending upon its size, its activities and its corporate culture. The scope and style of
audits vary, but common stages and activities include:
Pre­audit stage
full management commitment;
setting overall goals, objectives, scope and priorities;
selecting a team to ensure objectivity and professional competence;
Audit stage

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on­site audit, well defined and systematic using protocols or checklists;
review of documents and records;
review of policies;
interviews;
site inspection;
Post­ audit stage
evaluation of findings;
reporting with recommendations;
preparation of an action plan; and
follow­up.
4.6 There is an increasing demand for the results of auditing to be disclosed. Recent European
initiatives on access to environmental information (CEC, 1990) and the requirement of the Eco­
Management and Audit Scheme (CEC, 1993) for participants to publish environmental
statements confirm the importance of this.
5. Environmental Auditing and Environmental Management
Systems (EMS)
5.1 An EMS is a tool designed to enable organisations to target, achieve and demonstrate
continuous improvement in environmental performance. It is one integrated management
process with a number of stages, which includes an environmental audit. There are a number
of standards (e.g. the British Standard BS7750 (BS11992), the European Eco­Management
and Audit Scheme for Industry (CEC, 1993) and the DoE Eco­Management and Audit Scheme
for UK Local Authorities (DoE,1995)). These consist of most or all of the following elements
depending on the standard, to:
1. adopt an environmental policy to confirm and promote commitment to continual
improvement in environmental performance;
2. undertake an environmental review to identify significant environmental issues and effects;
3. set up environmental programmes of objectives, targets and actions;
4. establish an environmental management system to ensure the implementation of the
necessary actions to achieve these objectives;
5. undertake periodic environmental audits to assess the performance of such components;
6. prepare an environmental statement on environmental performance; and
7. obtain independent verification of the environmental statement.
5.2 Many companies have set up internal environmental standards which are applied world­
wide. These may be more stringent than local legislation.
6. Public sector environmental auditing

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6.1 Increasingly, public sector bodies and local authorities are adapting auditing methods to
establish baselines of environmental performance. These then inform management action.
6.2 Interest and action was stimulated in the late 1980s by the Friends of the Earth (1989). A
number of authorities prepared environmental charters, follow­up environmental strategies and
action plans, which are generally referred to as Green Plans (Raemaekers et al.. 1991 and
Raemaekers, 1993). It was not long before leading authorities also realised the greater
corporate performance and environmental benefits of the broader and deeper approaches of
the internal and external auditing (COSLA, 1992).
6.3 In 1989, the first local authority environmental audit was undertaken by Kirklees District
Council with the assistance of Friends of the Earth. Since then a number of Scottish local
authorities have produced environmental audits, notably Fife and Grampian Regional Councils,
Ross and Cromarty, Gordon, Falkirk, Clackmannan and Dundee District Councils. The scope of
public sector audits is different from that of the industrial sector in that the effects of service
provision are considered as well as the direct effects of the activities of the local authority:
Direct effects ­ environmental impacts that result from the way in which day to day
activities are undertaken. Direct effects are covered by internal management audit.
Service effects ­ environmental impacts that result from the organisations efforts in
implementing environmental policies and objectives. They would be covered by the Policy
Impact Assessment type of audit.
6.4 Additionally, audit techniques have been adapted to prepare State of the Environment
Reports. After several authorities, including Fife Regional Council and Ross and Cromarty
District Council, piloted the approach, the DoE published a guide to implementing
environmental management systems within local authorities. It is referred to as UK­EMAS, as it
was derived from the European Eco­Management and Audit Scheme (DoE, 1993).
6.5 Typically public sector audits cover a number of target areas such as:
energy use;
recycling;
hardwoods from sustainable sources;
environmental education;
habitat conservation and creation;
green purchasing; and
traffic calming.
6.6 Inevitably there are issues which may have been overlooked or might be misinterpreted,
and further and clearer guidance will be necessary. SNH along with the Countryside
Commission and the Countryside Council for Wales have commissioned guidance on the
treatment of countryside and conservation issues within State of the Environment Reports
(SNH, in prep).
7. The benefits of auditing
7.1 While environmental audits are designed to identify environmental problems, there may be
widely differing reasons for undertaking them: compliance with legislation, pressure from

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suppliers and customers, requirements from insurers or for capital projects, or to demonstrate
environmental activities to the public. The benefits of environmental auditing include:
ensuring compliance, not only with laws, regulations and standards, but also with
company policies and the requirements of an Environmental
Management System (EMS) standard;
enabling environmental problems and risks to be anticipated and responses planned;
to demonstrate that an organisation is aware of its impact upon the environment through
providing feedback;
increased awareness amongst stakeholders; and
more efficient resource use and financial savings.
8. Trends/future developments
8.1 Audit programmes are becoming a standard environmental management tool and
pressures for the disclosure of audit results are increasing. Public statements of environmental
information with external validation are required by those participating in the European or local
authority Eco­Management and Audit Scheme.
8.2 The utility of environmental audits vary from organisation to organisation. It is likely that
audits will be used increasingly to:
provide baseline information to enable
organisations to evaluate and manage
environmental change, threat and risk;
form the basis for initiating and monitoring the performance of Environmental
Management Systems;
contribute to environmental management approaches which become integrated with
environmental impact assessment and the management of predicted impacts, mitigation
and monitoring measures;
support the implementation and management of integrated pollution control procedures
and assist in the definition of 'best practicable environmental options' (BPEO);
tackle external off­site impacts which consider the broader environmental footprint of an
organisation's activities; and
pass environmentally responsible approaches down the supply chain.
8.3 Environmental audits have traditionally dealt with the environmental effects of industrial
processes and, to a lesser extent, with resource consumption. Guided by the legislation and
compliance procedures, the environment has usually been considered in terms of air land and
water. Considerable conservation benefits could be achieved by broadening the focus of
auditing to include natural heritage features and objectives. This would include natural heritage
legislation and by the application of audit techniques to habitats and land use, such as farm
units (Edwards et al.. 1992, LEAF, 1994), forest management units, or sporting estates.
Generic approaches could contribute to the development of conservation management plans.

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9. Further reading
Bedfordshire County Council and RSPB (Royal Society for the Protection of Birds), 1996. A
step by step guide to environmental appraisal. Bedfordshire County Council, Bedford.
BSI (British Standards Institute), 1992. Specification for Environmental Management Systems.
BSI, London.
CBI (Confederation of British Industry), 1990. Narrowing the gap: Environmental Auditing
Guidelines for Businesses. CBI, London.
CEC (Council of the European Communities) 1990. Council Directive (90/313/EC) on the
freedom of access to information on the
environment. Official Journal No. L158, 23/6/90.
CEC (Council of the European Communities). 1993. Council Regulation (EEC) No 1836/93 of
29th June 1993 allowing voluntary participation by companies in the industrial sector in a
Community Eco­management and audit scheme. Official Journal No. L168, 10/07/93.
COSLA (Convention of Scottish Local Authorities), 1992. Guidelines on environmental auditing.
COSLA, Edinburgh.
DoE (Department of the Environment), 1993. A guide to the Eco­Management and Audit
Scheme for UK Local Government. HMSO, London.
Edwards­Jones, G, Gotts, D. and McGregor, J.M., 1992. Environmental auditing and its
relevance to agriculture. Farm Management, Vol 8, No 2, Summer 1992.
ERM (Environmental Resources Management), 1996. Environmental audit and assessment:
concepts, measures, practices and initiatives. SNH Review No 46. SNH, Battleby.
FoE (Friends of the Earth), 1989. Environmental Charter for Local Government ­ Practical
Recommendations. FoE, London.
Grayson, L, 1992. Environmental auditing: a guide to best practice in the UK and Europe. The
British Library, Letchworth.
LEAF (Linking Environment and Farming), 1994. The LEAF environment audit (1995). LEAF,
National Agriculture Centre, Stoneleigh, Warwickshire.
LGMB (Local Government Management Board), 1991. Environmental auditing in local
government; a guide and discussion paper. LGMB, Luton, Bedfordshire
Raemaekers, J., 1993. Corporate environmental management in local government:: the quality
and management of action programmes, internal audits and State of the Environment Reports.
Research Paper 48. School of Planning and Housing, Edinburgh College of Art/Heriot­Watt
University, Edinburgh.

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Raemaekers, J., Cowie, L. and Wilson, L., 1991. An index of local authority Green Plans.
Research Paper 37. School of Planning and Housing, Edinburgh College of Art/Heriot­Watt
University, Edinburgh.
Scottish Natural Heritage, fin prep). Local State of the Environment Reports: the treatment of
countryside and conservation issues. SNH, Environmental Audit Branch, Edinburgh.
Therivel, R., 1994. Environmental appraisal of development plans in practice. School of
Planning, Oxford Brookes University, Oxford.
Thompson, S. and Therivel, R., 1991. Eds: Environmental auditing. Working Paper No 130.
Oxford Brookes University, Schools of Biological and Molecular Sciences, and Planning,
Oxford.
Welford R. and Gouldson, A., 1993. Environmental management and business strategy. Pitman
Publishing, London.
10. Acknowledgements
This Note is based partly on a study commissioned by SNH, which was carried out by
Environmental Resources Management (ERM, 1996).
11. Author and contact for further advice and information
Julian Holbrook
Environmental Audit Branch
Research and Advisory Services Directorate
2 Anderson Place
EDINBURGH EH6 5NP
Tel: 0131­446 2455
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